What financial information is a potential investor entitled to?

[mosescapetown]

We just had the same situation with one of our clients. He is also in manufacturing.

The investor also required the following
1- a due diligence
2- latest audited statements
3- 3 year cash flow projection
4- Proof of brand registration
5- Supply agreements
6- Listing agreements
7- Debtor and creditor books
8- business plan stipulating the future expansion of company

There might have been more request i cannot remember of hand I will edit if i missed anything.
Point is we also immediately advised the client to not give any info that we did not check or approve with him. For the same reason as mentioned by Yaku. Our client also had allot of IP and recopies as part of the brand so naturally that will also not be disclosed before the investor bought (and paid for) shares. And even then some stuff will not be disclosed. (recopies and blending tricks etc, ect). We also did a due diligence on the investor before giving any information. This was to ensure the investor was legit and not hunting for trade secrets only (as happens often in the trade)

Making a long story short. We assisted the client in preparing and presenting the requested paperwork and of coarse getting the necessary NDA's in place. (not that they mean much) taking care not to say too much but also say enough to satisfy the investors need to asses properly.

lastly... and sorry if i step on any tows. DO NOT use a broker in this process. getting a valuation can also be done in several ways. use an Attorney for the job and one that knows and understand company law and business practice. A bonus will be one that knows tax also.

Armed with a good lawyer and auditor you will be guided through the process without pain and loss. it will also protect you against the business pirates out there.

My 2 cent